Government breaks even on Lloyds rescue

Government breaks even on Lloyds rescue

The government has recovered all of the £20.3bn it injected into Lloyds Banking Group during the financial crisis.

Speaking in Washington on Friday, the Chancellor of the Exchequer Philip Hammond said the government had received £20.4bn since it began selling its stake in Lloyds in 2013, including both sales and dividends.

The government still holds less than 2 per cent of Lloyds stock, which it expects to sell in the coming months, depending on market conditions.

Mr Hammond said: “Recovering all of the money taxpayers injected into Lloyds marks a significant milestone in our plan to build an economy that works for everyone.

“While it was right to step in with support during the financial crisis, the government should not be in the business of owning banks in the long term.

“The right place for them is in the private sector and I’m pleased to be able to say we are approaching the point at which we will sell our final shares in Lloyds Bank.”

In January HM Treasury announced that it was no longer the largest shareholder in Lloyds, with BlackRock taking that position.

Former chancellor George Osborne had planned to sell the final Lloyds stake in spring last year through an offering to retail and institutional investors, with the former receiving a 5 per cent discount plus a bonus share for every 10 held for more than a year.

But this was put on hold last year because of market volatility.

Mr Osborne’s successor, Mr Hammond, announced on 7 October 2016 that more sales of Lloyds shares would be made through a trading plan.

At that time Mr Hammond scrapped Mr Osborne’s plans of selling the shares to retail investors completely, citing market volatility.